Twitter has announced today that whilst they are making more from advertising than ever before, ad rates have fallen by 67% since the start of 2013, making Twitter advertising more attractive to smaller businesses.
Although Twitter's total ad revenue topped $664 million in 2013, a 110% year on year increase, its expanding advertising inventory – the space that is available to advertisers on Twitter – has led to a dramatic fall in its ad rates. According to data compiled by Quartz from regulatory filings, Twitter's ad rates have fallen by 81% since 2012.
This is, of course, great news for small businesses who can now seriously look at Twitter as a possible advertising channel. The lower costs of Twitter's Promoted Products service has already led to an increase in smaller businesses exploring it as a way of advertising their products and building their brand visibility and reach on Twitter.
Twitter's Interest Graph of users is becoming one of the most valuable Twitter tools for advertisers, allowing them to target people in real-time based on their interests, data sourced by examining who users are following and retweeting.
Twitter stated: “We believe that our ability to compete effectively for advertiser spend depends upon many factors, including the size and composition of our user base; our ad targeting capabilities; the timing and market acceptance of our advertising services; our marketing and selling efforts; the return our advertisers receive from our advertising services; and our reputation and the strength of our brand.”